Monday, February 18, 2013

Today Mike Johanns announced he was retiring from the Senate and will not seek another term. This guy is a career politician of little import or impact. He has no value to society and has been making a fat living on the public dole as a senator for many years now. Intelligent people will want to ponder why he is walking away from all that power and pomp at this particular time. The article states, "Johanns becomes the fifth sitting senator to opt against seeking another term, joining Democrats Jay Rockefeller (W.Va.), Tom Harkin (Iowa) and Frank Lautenberg (N.J.), and Republican Saxby Chambiss (Ga.)."

Call me crazy but mass power abdication is very unusual elitist behavior. If I had to guess at what is happening it would be that rats are leaving the sinking ship. They bled the system for all it was worth and now they sense that SHTF ($hit Hits The Fan) could occur during their next term. In that case, better to bail out now under "honorable" conditions. This is not random. These guys are the Jason Bournes of politics; they don't "do" random. It reminds me greatly of when I used to frequent the Yahoo stock chat board for Frontline (FRO). One day a few years back the CEO just decided to up and quit to "spend more time with his family" or some such. At that time the time was stock was well north of $50 IIRC and I posted on the yahoo chat board for FRO that it was the kiss of death. You see, FRO had been paying massive dividends with a payout ratio of more than 100% for some time. In other words, the dividends were being financed or savings were being decimated in order to pay the dividend. The stock now trades for $3 and change. Coincidence? Yeah, right.

Gutting the system before bailing out is what con men do. When you see them jump out of what appears to be a perfectly good airplane with their golden parachutes strapped on and a bag of cash under each arm you better go check to see what they did to the autopilot. Check the fuel level while you are at it. In fact, check everything because something is guaranteed to be fatally wrong with the plane else they would not have bailed out. If the problem is something that could possibly be fixed, they would stay in it to win it for themselves. But if there is a near certain chance of catastrophe, expect them to quietly make their way to the exit, carefully avoiding sending out warnings or alarms that others could pick up on to save themselves.

Its not that they want you to go down with the ship. The fact is that they are self-serving a$$holes who don't really care if you live or die. Their lack of desire to give you truthful warning is driven by their concern that if others know there is a problem then the ensuing panic and rush for the exit by "useless eaters" will make it difficult or impossible for them to get away clean. Of course, they could from the exit door way call back to the people and warn them as a last act before bailing out. But then it would be clear they had prior knowledge and failed to help the people in whose representation they profited so well for so long. It profits not a man to get out of the airplane alive only to be hanged for treason when he finally makes it to the ground.

Sunday, February 17, 2013

For at least the last 6-7 years, we've heard increasing government chatter about "growth" both here in the US and abroad. In fact, "confidence" and "growth" seem to be part of every economic speech these days. This should be a warning sign but after people hear it enough times they start to parrot it as economic fact. In truth, if you have some percentage of "growth" every year, that is an exponential function. It has been proven time and again that exponents and true economic are incompatible. And real economies do not need pleas for confidence. The confidence is built in and inextricable from an honest economy. Only the Debt Ponzi economy needs additional confidence in order to survive a while longer and only con men are calling for confidence.

In fact, the only valid reason for the requirement of growth is population growth. But evidence shows that the growth rate of the population is declining. It's as if the human herd somehow senses, like many kinds of herds do, that the carrying capacity of the planet is near and so birth rates slow down. So if this is the case, why do we require continuous "growth" of the economy? The answer is pretty simple if you understand the truth of what is going on. The growth has not been real growth. It has been artificial, debt-fueled growth. The world is now reaching the limit of the debt that it either wants to or can afford to take on. Thus, debt fueled growth is waning.

The Global Debt Ponzi has entered the collapse stage. It could take years or it could take decades to play out. There is no easy way to tell because it's all about confidence of the people. If the people are stupid and easily manipulated then the unwinding process could take decades as it has done in Japan. This is why government propaganda keeps preaching confidence. But I do not think we have decades left. I think that the economic termites have eaten all the structural wood out from under us. They stopped right at the paint as termites usually do. The structure looks OK still but a stiff wind will blow it over.

There are too many stiff winds in the economic weather forecast to allow this Ponzi collapse to take more than 5 years more to play out IMO. Japan has now committed itself to a debt death spiral by targeting 2% inflation which, if they achieve that level, will make their interest rates rise past the gpoint that all tax collections can possibly service the debt. And that's with doing nothing else with the money but pay the interest. When Japan goes down it will be a massive domino collapse. To reference Warren Buffet, we will see that the entire world is skinny dipping economically as the global tide recedes.

Euroland is also steadily sliding off the cliff. Spain's debt is increasing at a dramatic rate despite lack of visible panic in the markets. The panic will return. For sure. There is way too much collective calm given the collapsing global fundamentals. Anything that looks good only appears that way because the Federal Reserve is pumping $80 bn into the economy every month. It is a Grand Illusion.

Friday, February 15, 2013

If I had to boil more than 4000 hours of economic study down to one simple idea that I could tell the world it would be this: fake money is the root of all our economic problems. I'll go further to say that most social problems are economic ones. People can be happy if they are poor if they think the rest of the herd is poor too. This is a fact that most people just don't get. The Eagles nailed it in their song After The Thrill Is Gone. They wrote/sang, "you don't care much about winning but you don't want to lose". That is herding 101 and the human species is a herding species. We can't help it. It's in our DNA. If people see others prospering while they themselves are suffering and if they believe that the prosperers are stealing the prosperity of the sufferers then all sorts of social problems arise.

Fake money is money that you don't have to earn before having it. Fake money is money that "special" or "connected" people get while at the same time mere mortals like you and I have no access to it (cronyism). It allows the connected few to use massive leverage while normal people have to play with only what they earn by the sweat of their brows. If the gambles don't pay off then too bad so sad, nothing happens to the con men. The transgression is forgiven and the weight of their mistakes falls on the backs of everyone else who was playing honestly. If you have physical commodity money like gold and silver, or even a metallic standard backed paper currency then you cannot make it up from thin air on a whim. But fraudulent, fake fiat currency and fractional reserve banking? That's just funny money that can be created or destroyed in massive quantities by the big boys running the show and its use is tearing our society apart.

The herd does well when it believes fairness is in effect. Even if times are hard and pastures are lean, the fairly treated herd sticks together. In fact, in hard times the herd sticks together even tighter knowing that there is strength in undivided numbers. But when faced with gross unfairness, the herd does not do well. Those that feel they are getting the short end of the stick eventually break away and begin a new herd or there is massive infighting to decide who is going to be in charge. But even before that we see a rise in discontentment, complaining, acting out, theft, etc. as the weaker players do whatever they can to strike back at the old guard running the status quo.

Fiat currency and fractional reserve banking allow the elite to get rich off of playing the game of life using fantastic leverage. After they've made enough cash they can have a Jack Welch moment and retire into the sunset leaving the rest of society saddled with the debt they created. Then they can sit back and make comments from the sidelines about how things have degenerated since when they were running the show. Of course, they know that they were instrumental in running the Ponzi and they just got out before it began to collapse. The reason they run their mouths is in order to try to fool people into thinking they had nothing to do with it. Thus when it collapses they hope they will not be targeted. Good luck with that.

When people see all the bad things going on in banking, they go after the symptoms as if that will do any good. They fail to see the root cause. So the cry goes out for more regulation and laws and bigger government to drive fairness and sanity into the system. And now we have an increasing number of nut jobs shooting up theaters and grade schools and going Rambo on the LAPD. If you found the root cause of each of these things it would eventually come back to an economic situation that made someone feel like they were getting screwed. These people read the news and got angry at how the fat cats were bailing themselves out while the man on the street is left with rapidly diminishing prospects for a happy and fulfilling life. And so, not being particularly bright, they act out. They kill strangers. They cry for attention in the only way they can get it.

I have been writing these things for YEARS now yet so few people actually see it. I'm convinced that they do hear me and that they do understand my argument but because I am not an important person with a bunch of official proclamations of importance (like PhDs or appointment to government positions), my logic falls on deaf ears. This is why it is so very satisfying to see someone like Mike Shedlock provide the exact same insight in his own unique way.

Wednesday, February 6, 2013

In the past I’ve reported on activities like Utah declaring gold and
silver legal tender as well as commodities exchanges taking gold as collateral for
trades.The reason I deemed these things
important is that they are first steps in my long standing prediction that the global
fiat currency system will eventually be understood to be a corrupt, fraudulent mania which will, by
definition, collapse at some point.The
only thing that can possibly replace it is some gold standard.It is the only thing that the patsies will
trust once they realize they’ve gotten ripped off by the system they once
believed in.

Today I want to call your attention to new talks among Virginia
lawmakers.Here is the first paragraph
from this link:

“It’s starting to look like Virginia could yet emerge in a
leading role among the states in respect of monetary reform. The lower chamber
of its general assembly has passed a bill to underwrite a study of the
feasibility of a monetary unit based on a metallic standard. It is one of a
number of states that are reaching deep into the Constitution of the United
States to protect themselves in an era when the value of the dollars issued by
the federal government is collapsing.”

What’s important here is that the focus of this early effort goes way beyond the fairly easy goal of
giving gold and silver monetary status.When Utah passed their recent law re-monifying gold and silver, it
basically had 2 implications:

1.You don’t pay sales tax converting cash into these metals any more than
you pay sales tax if you ask someone to break a $20 bill and get two fives and
a ten.Gold and silver are no longer “purchased”
there.You can simply exchange your stored value between
gold, silver and paper money without generating a taxable sales event.

2.There is no more state level capital gains tax on gold and silver in Utah.You can now store your retirement savings in
real money during your working life and then have no state "capital gains" tax bill when you convert it into paper money in order
to buy food and pay rent in retirement.

The federal government has been silent on that matter to date, probably
because they did not see physical gold money as being competition for the fiat currency
that it controls.Why?Because few people in this day and age want to buy and sell stuff
using heavy, bulky gold and silver coins.They want to do it electronically and for that it requires some sort of
paper currency that can ultimately be expressed digitally.Physical gold and silver can never do that,
thus no perceived threat to the con men in the federal government.It would only do their cause more harm than good to go after Utah about
it at this point.

But Virginia isn’t talking about making gold and silver coins legal
tender.They are talking about creating
gold backed paper money, a “monetary unit based on a metallic standard”.They are talking about creating state sponsored money. Once you have a legal currency that is backed
by a verifiable quantity of metal, all bets are off for the federal fiat currency
system. If people start
using other, honest money, how can federal taxes be collected??How can retirement savings be stolen by
inflation and then used to fund the military industrial complex, black projects, trillions of dollars going down rat holes never to be seen again, etc.?

The federal government will lose power because the power
it has is 100% given by its control of the money supply. Take that away and people will not fear it. Take that away and it will no longer be able to print money in order to pay its bills, including the service on its debts. If people start using other money, they will feel very disconnected from the federal government and everything the feds say will be mocked. Unjust federal laws will be ignored within such states.

This is a major, major big
deal.If Virginia makes this a law, other
states will follow and andIn short, it will risk
collapse of our country as we know it.It could be the
basis of de-unification of these United States.It could be the seeds of civil war.It’s really up to the feds on whether they think they can use physical
force to keep people within the confines of the corrupt monetary system which
is, economically speaking, a mechanism for the theft of stored labor via
inflation.Another word for stealing
someone’s labor is “slavery”.

This may sound like extreme talk but please note, these are the same
things I have been writing about for years.I’m not changing my tune to match the facts.The truth is simply emerging from the ongoing
collapse of a fraudulent monetary system that had everyone mesmerized until
now.The people are awakening and they
are acting.

I say again, long term
savings should be kept only in gold and silver metals.Get there over time but do get there.Average your way in over time so that
volatility does not sway your worldview.

They will do it in the name of protecting you but what they
will really be doing is protecting the government’s ability to continue
borrowing.They will pledge your cash as
collateral for the national debt just as Geithner recently pledged government
worker’s retirement funds as short term backing for the national spend until
the debt ceiling could be increased again.If the interest rate on government borrowing is allowed to rise, the
debt service will consume too much of our tax dollars and people will know that
the US has entered the debt spiral.The
way to keep interest rates from rising is to increase demand for government
debt.That means they need new buyers at
a time when confidence in the US is waning and when global profits are
falling.In other words, government
knows that there will someday be a lack of buyers of its debt either because
the patsies wake up to the scam or because they have no profits left to put
into savings. When this happens, government’s next move will be to use
retirement savings to buy the US debt.Since many people don’t want this to happen, government will just take
control in some form or fashion of the retirement system and then “invest” it
all in US debt.It will start with
government workers retirements (government knows they have better control of
their own employees) but at some point it will expand to every retirement
dollar which has been invested in a government controlled program.

It is time to suspend disbelief if you haven’t already.They are planning, scheming, waiting until
the political environment allows it.But
make no mistake: the only value left in our debt ridden country is the
retirement savings of the boomers.

Taxes are now going up as I knew they would but not nearly
fast enough to make up for massive budget shortfalls.The proof is in the never ending debt limit
increases.Government cannot stop
because debt is the fuel of the debt Ponzi and without ever increasing amounts
of it the pyramid scheme will collapse.When that happens, people will suddenly wake up to the scam and they
will want answers to how we could have been told everything was alright only to
end up getting screwed.And when that
happens, people will also finally begin to demand the truth about many past US
government crimes against the American people including what happened on 911.

The answer is simple: remove yourself from the Ponzi right
here, right now.Save for retirement in
gold and silver coins which live outside of the scam of fiat currency and
fractional reserve lending.Once you
have them, government is powerless to steal them from you without completely
tipping its hand.Such an extreme move
would likely result in civil war at this point so the government will ignore
the escapees as long as it can.It will
take a mass exodus from the retirement system and from the dollar for
government to go after holders of real, constitutional money in the form of
gold and silver coins.Stealing that
real money from the people will not be worth the effort and risk that it will
occur to government con men so rest assured that gold and silver will not be
confiscated.

Saturday, February 2, 2013

Mike Shedlock is required reading for anyone who wants to know the real state of the economy. He has, since I began reading him in 2006, be the most accurate caller of all things economic out there. Others have gotten other some aspects right in a big way but then missed the boat with "immediate hyperinflation" calls. Knowing that this will result in a tangent to even mention, Peter Schiff jumps to mind. While he has been wrong in his hyperinflation calls so far, I will never forget this YouTube video of him telling a bunch of mortgage bankers and investors that the housing bubble was a bubble and that it would pop. Many of his predictions were spot on and the rest of them will probably occur over time.

Please watch the whole thing even if you already saw it in the past. You will learn something for sure. Perhaps the most instructive part of the video (and most relevant to points I will make below) is the reaction of the audience and the response from the talking head economist (all near the end of the video). They are priceless in terms of making the individual journey out of the herd and into a more enlightened state. The main point here is that people could not listen to logic and math. Their heads were up their asses and they could not see the light of day. This is and will continue to be an important lesson to keep in mind as the global debt Ponzi unfolds in the coming years.

In any case, Mish is a data driven person. So what you get from him is a good real time read of the state of things. What you don't get from him is a lot of top level picture insight early on. Why? Because early on you never have any hard data about the big picture. Big picture data comes in like puzzle pieces. Mish waits until a big part of the pieces are in hand before he will see and report on the big picture. It means when he makes a call that it's probably correct but he will wait to make the call longer than I would like to see. In particular, he is very slow to call bullshit on government lies. It's probably not because he can't see it in advance. It's probably more related to running a popular blog and wanting to keep readership of people who are quick to laugh at "conspiracy theorists" no matter how well informed they might be.

Recently I am seeing Mish begin to call bull$hit on the government employment numbers. While it was obvious to me that Obama did whatever he could to make things look artificially rosy during the election year in order to get re-elected, Mish has defended the likely honesty of the employment numbers all this time. But lately he is showing signs of awakening is in this short post of his. His bottom line is "Digging under the surface, much of the drop in the unemployment rate
over the past two years is nothing but a statistical mirage. Things are
much worse than the reported numbers indicate." That's starting to sound a bit like a conspiracy theory, Mish.

The point of my blog post isn't really about the unemployment rate or the fact that the government is engaged in feel-good propaganda (AKA manipulative lies) across the board, including . It's about the fact that enough pieces of the lies are now visible and are known that conservative thinkers like Mish are starting to call a spade a spade. In other words, it's yet another in a long list of signs that people's confidence in our lying, corrupt government is waning. The confidence game is moving toward collapse.

Once that confidence is gone, and it certainly will go away in the coming years, it is nearly impossible to get back. Once the con game collapses and the patsies get wise, it's really hard to fool them again. Even the sheeple who cannot bring themselves to believe that our government was clearly aware of in advance/in collaboration with/directly involved with the 3 steel frame buildings that collapsed on 911 will suddenly wake up to the logic and facts of the matter.

It is an ugly thing to see the herd wake up and realize how badly it has been fooled and how gullible it allowed itself to be. Because of the Kubler-Ross grief cycle, the confidence pendulum swings the other way and over corrects. People become completely cynical (despite any positive facts that might surface in the future) as they enter the teeth of the anger stage. This is the stuff that civil unrest and even war is made of.

One day, people are going to finally question the real need behind things like government tracking of the unemployment numbers. Think about it, why do they do this? It costs money and takes time. People involved with creating the data and with following the data once its created are wasting huge amounts of time that could be spent bettering our world, producing something of value. One day, people will realize that this is nothing more than a parasitic feedback mechanism done by government and for government. Government tracks these things so that it can know how much economic value to extract from the herd without killing it.

It's no different from ranchers measuring the weight of their animals, feed consumption, amount of wool or milk they produce, etc. People don't need government tracking any of this. Governments do it because they consider people as livestock. Government lives off the labor of people the same way as ranchers live off the lives of chickens and cows and sheep. Government is parasitic. In the same way that free horses (AKA"wild horses" by ranchers who think anything they don't own is bad) do not need ranchers, free men do not need government. People who do need government are, by definition, not free.

Now stop rolling your eyes and actually think about the logic of what you just read. If you don't already see it, you will someday. God willing, and the river don't rise.